British Prime Minister Boris Johnson meets US President Donald Trump during the G7 summit in Biarritz, France, August 25 2019. Picture: STEFAN ROUSSEAU/REUTERS
British Prime Minister Boris Johnson meets US President Donald Trump during the G7 summit in Biarritz, France, August 25 2019. Picture: STEFAN ROUSSEAU/REUTERS

Biarritz—President Donald Trump wishes he had raised tariffs on Chinese goods even higher last week, the White House said on Sunday, even as Trump signalled he did not plan to follow through with a demand that US  firms find ways to close operations in China.

Trump raised eyebrows on the sidelines of a G7 summit when he responded in the affirmative to questions from reporters on whether he had any second thoughts about raising tariffs on Chinese goods by 5%.

"President Trump responded in the affirmative — because he regrets not raising the tariffs higher," White House spokeswoman Stephanie Grisham said in a statement afterward that sought to clarify the president's remarks.

Trump announced the additional duty on about $550bn in targeted Chinese goods on Friday, hours after China unveiled retaliatory tariffs on $75bn worth of US goods.

The move was the latest round in a tit-for-tat trade war between the world's two largest economies that has damaged global growth, upset allies, and raised market fears that the world economy will tip into a recession.

It came just hours after Trump said he was ordering US companies to find "alternatives" to China, including closing operations there and moving production to the US.

US treasury secretary Steven Mnuchin said Trump could order companies out of China under the International Emergency Economic Powers Act if he declared a national emergency.

Trump indicated on Sunday that he was not planning such a step at this time, however.

"I could declare a national emergency. I think when they steal and take out, and   intellectual property theft, anywhere from $300bn to $500bn a year, and where we have a total loss of almost a trillion dollars a year ... in many ways, that's an emergency," he said.

"I have no plan right now. Actually, we're getting along very well with China right now. We're talking," Trump said.

Mnuchin said the president did want US businesses to start looking to shift investments away from China, saying they would be better off in the event the US-China trade war lasted for a long time.

"We want them to be in places where they're trading partners that respect us and trade with us fairly," he said on the "Fox News Sunday" program.

'Second thoughts'

During his meeting with Johnson on Sunday in France, Trump was asked if he had second thoughts about his latest escalation.

"Yeah, sure. Why not?" he said.

The reporter repeated the question and Trump replied: "Might as well. Might as well."

A second reporter followed up again, asking if he had second thoughts about escalating the trade war with China.

"I have second thoughts about everything," Trump responded.

Asked to clarify Trump's remarks, Mnuchin, who is one of the lead US negotiators in trade talks with Beijing, said Trump remained resolute in trying to force concessions from China.

Another top official said he did not think Beijing would retaliate for the latest increase in tariffs.

"I think his was an action to respond to their action. So I doubt whether they're going to take another step," White House economic adviser Larry Kudlow said. "We'll have to wait and see."

Mnuchin said Trump and Chinese President Xi Jinping were now "enemies" on trade, despite an otherwise good relationship.

"President Xi is still his friend," he said. "But as it relates to financial issues and trade, we have become enemies. We're not making progress."

Reuters